Additionally, Assembly Bill 1309, Assemblyman Henry T. Perea’s legislation to put a hold on the non-California professional athlete gravy train, is moving along as well, recently passing the Committee on Insurance. My readers will also recall a blog post on this topic, a tiny whisper in a sea of angry voices bemoaning the potential loss in attorney fees and liens.

Your humble blogger will continue to sacrifice goats to the dark gods of legislation, hoping for the demise of SB 626 and the success of AB 1309. Here’s hoping you have a good week!

Earlier this month, your humble blogger related to you, my fearless and fairly optimistic readers, the case of Eliezer Figueroa v. B.C. Doering Co.There, the Workers’ Compensation Appeals Board held, in a significant panel decision, that a lien claimant had to have its lien activation fee paid before the time of day the hearing was set to start. In Figueroa, the lien claimant waited until 11:00 a.m. to pay its lien activation fee (as is now required by Labor Code section 4903.06).

No, dear readers, there was no missed alarm or hung over hearing representative… no one rushing to the Board, getting dressed on the bus, or using a smart phone to pay a lien activation fee on the way down to the hearing.

Instead, the lien claimant’s representative was likely at the Board at or around 8:30 a.m., prepared to negotiate settlement of the lien or litigate it if necessary. So why the 11:00 a.m. payment? Well, lien claimants don’t get that activation fee back. So if you have a lien for $150, there’s not a lot of sense in paying a lien activation fee if the matter is going to settle at the hearing. (Lien claimants can recover the lien activation fee if, pursuant to Labor Code section 4903.07, an offer to settle is timely made and an ultimate award is greater than the offer to settle).

So, naturally, the lien claimants in general, much like the lien claimant in this case, waited to see if the lien could be resolved, and then paid the lien activation fee before going in to see the judge (when settlement negotiations fell through).

Well, the WCAB wasn’t going to tolerate this, and it wasn’t going to tolerate any workers’ compensation Judge muttering something about a “significant panel decision” being non-binding law. So, late last night, your humble blogger received a visit from the official WCAB carrier pigeon. Attached to this exhausted little bird’s leg was a six-page en banc decision in this very case.

The WCAB’s en banc opinion in the Figueroa matter proved to be even more delicious than the messenger. There is to be no confusion about this – a lien claimant must pay its activation fee before the start of the hearing (not when the hearing is called). Also, if it wants a shot at its lien filing fee back, it needs to make sure to provide a timely offer to settle, and the number has to be low enough to not overshoot the possible award.

Now, if you’re a lien claimant, you might be asking yourself “why? Why would the Board be so cruel to us?” THAT’S THE POINT IN THE LEGISLATION. Lien claimants, like locusts on a crop field or tourists in San Francisco’s Pier 39, are creating a stifling effect – the intended beneficiary of the system is getting hurt. The point is to make lien claimants go away, or at least to burn out the “nickel and dime” lien claimants that hope to get rich by having thousands of petty liens.

I any case, now the defense community has a fairly sturdy broom with which to sweep away some of the more frivolous liens. Good hunting!

As my beloved readers may recall, this blog reported to you the matter of County of Sacramento v. WCAB (Michael Brooks), in which the County of Sacramento valiantly but, at least initially, without much success, the determination by the Workers’ Compensation Appeals Board that a probation officer’s grievance and personal feelings in response to his perception that the grievance was not properly responded to by his supervisors, did not constitute a “personnel action” under Labor Code section 3208.3(h), and the resulting injury to the psyche was therefore compensable.

In that post, your humble blogger made the argument that an applicant’s personal feelings in response to a good faith personnel action are the same as the action itself, and so should bar any recover for an injury to the psyche.

The Court of Appeal reviewed the decision of the WCAB, and reversed. The reasoning behind this oh-so-gratifying reversal? “The Board’s causation analysis treated Brooks’s ‘feelings that he was unsupported by his supervisors’ as a cause of psychiatric injury, as did [the Agreed Medical Evaluator]. In reality, however, his feelings were the injury, or symptoms of the injury, not the cause of the injury.”

But the fun doesn’t stop there. As my readers may recall, there was a similar case, The Tribune v. WCAB. In that case, the Workers’ Compensation Appeals Board found that there was no good-faith personnel action defense to bar the psyche claim of Arthur Ecker, because the injury was caused by his “stress” of having to take on new job duties, mostly related to the increased use of computer technology. This increase in duties was, after all, a good-faith personnel action on the part of the Tribune, which sought to reduce its staff because a decrease in circulation necessitated a 2/3rd reduction in staff.

In that case, again, applicant effectively made the same argument – his feelings in response to the personnel action were the basis of his injury. EAMS reflects a date of injury of November 16, 2008 and that the matter resolved with a finding and award. Should someone tell the Tribune to petition to re-open the case and stop all benefits (if any remain to be provided)? Tick-tock…

Sir William Osler, M.D., a great man among the great people of Canada (sometimes known as Canadanians), is famously quoted as saying “[t]he good physician treats the disease; the great physician treats the patient who has the disease.” Far be it from your humble blogger to compare the great practice of medicine with the lowly pursuit of the law, but lawyers should be held to the same standard.

It’s easy for an applicant’s attorney to review his patient’s client’s file and see dollar signs. Sadly, some attorneys only think of ways to inflate a client’s permanent disability, there being no money in having an injured worker return to full health and full job duty.

A particularly tragic example of this has recently splashed onto the pages of the Wall Street Journal, reporting that the U.S. Attorney for the Central District of California is investigating Michael D. Drobot for allegedly paying kickbacks for referrals to his surgery center (Pacific Hospital of Long Beach). The WSJ also reports that “[f]rom 2001 to 2010 … it performed 5,138 spinal fusions on workers’ compensation patients and billed $533 million for them – three times as much as any other hospital in California.”

The story continues to report that Mr. Drobot also owns a spinal-implant distributorship, allowing him to profit from the marked-up spinal implants as well as the surgery itself.

Now, imagine, dear readers, the doctor that is influenced by Mr. Drobot’s alleged bribes to send a patient under the knife instead of into conservative care. Imagine also, dear readers, the type of attorney who sends his or her patient to such a doctor, knowing that needless surgery is a very likely recommendation.

Of course, increased medical costs, and resulting permanent disability will inflate the workers’ “recovery”, and also the attorney’s fee. But what about the worker? After the extra thousands of dollars run out, how is one to return to work with a permanently scarred and damaged back?

If Mr. Drobot did, in fact, engage in bribing physicians to refer workers to his facility for spinal surgery and to use his surgical implants, this humble blogger hopes that justice is swift and equal to the crime, and that news of such consequences resonates throughout the State. Hopefully, Mr. Drobot’s records will provide a list of physicians who accepted such payments and their licenses suffer the same fate as their victims’ spines (crippling and irrevocable damage).

Applicant’s attorneys should take note as well – it’s the ethical duty of an attorney to advise and counsel his or her client, and not sell the clients’ health for more workers’ compensation dollars. Treat the patient, not just the disease; advise the client, not just the matter.

If things keep going like they’re going, Assembly Bill 1309 might become irrelevant after all. The bill would effectively bar cumulative trauma claims for visiting professional athletes, and is of course meeting with opposition from the usual suspects.

But the NFL isn’t waiting for California to decide whether or not it wants to be on the receiving end of a boycott for games and training camps – Federal courts are deciding the issues in other states and are consistently telling professional athletes that they must honor their employment contracts and bring their claims for workers’ compensation in their home states.

If you’re not a California team owner, you should be scrambling to create some precedent in your home state for the fact that the forum-selection clause of the pro-sports employment contract is enforceable and requires a professional athlete to bring his or her claim for injury in the home-state of the team.

If the pro-sports teams continue to win victories outside of California, it won’t matter much what happens to AB 1309.

I know the applicants’ attorneys are all chomping at the bit to get pro-sports clients in California, and the defense attorneys are probably looking forward to all those extra billable hours as they valiantly defend this team or that from the meat-grinder of California’s Boards. Your humble blogger it not among them – logic, reason, and basic fairness have to trump a paycheck once in a while, and this is that once-in-a-while.

There is no reason why an employer from Any-State should have to defend a claim in California and be liable for a California award when its employee has barely any connection to California. And continued efforts to drag other teams here and milk them for dollars, which would flow to all the participants in the system, will end up costing California a lot of money – no more games, no more training camps (it simply won’t be worth it anymore).

The owner was allegedly advised by his accountant that he wouldn’t have to provide workers’ compensation insurance for his employees, if they were independent contractors (instead of employees). Unfortunately, the company owner took this advice without consulting an attorney, or even wondering why anyone would ever hire an employee instead of an independent contractor.

Hired to patrol a portion of Salinas, the employer was fined and is in a bit of trouble now, although there is no available information as to whether someone actually filed a workers’ compensation claim. The silver lining, as far as your humble blogger can tell, is that no one got hurt, and no injured worker will be left in the cold. Being an illegally uninsured employer is not a pretty picture by any means.

Well, Happy’s wasn’t very happy after the trial, and the workers’ compensation Judge didn’t have many happy things to say about it either when Happy’s petitioned the Workers’ Compensation Appeals Board for reconsideration.

The arguments were quickly dispatched – there was no basis to conclude that applicant was an independent contractor when he was paid a set salary every week and he performed his job duties under near total control of the employer. The going and coming rule did not apply because applicant reported to Happy’s place of business and then rode in the company truck to the specific job site. The fact that he rode in the company truck at all would have negated the going and coming rule, even if coming from home.

Neither the WCAB nor the Court of Appeal bothered to write an opinion on this case, and Happy’s saw its defenses wash down the drain (like at a car wash? Get it?)

California comp rates are expensive, and it’s constantly becoming harder and harder for businesses and employers. When you’re trying to make ends meet and keep the lights on in your business, it can be very tempting to save the money on a comp policy and apply it to things like inventory and wages and maybe bringing home some profits once in a while. After all, your employee agreed to be an independent contractor, and what could possibly happen on such a safe job, right?

Don’t do it. Even if you get lucky for years upon years, sooner or later someone will get hurt or a disgruntled employee will lie and say he did. If you’re a small business, the Board can be a cold and unforgiving place without the protection of an insurer, with its sharp adjusters and crack team of attorneys (such as your humble blogger).

In a recent case, Samuel Turco v. City of Oakland, a workers’ compensation Judge found the applicant to have sustained a cumulative trauma to his ol’ ticker heart and cardiovascular system through his term with the brave men (and women) of the Oakland Police Department.

His career ended in 1998, however, so defendant City of Oakland became inclined to raise the statute of limitations defense, seeing how the application was only filed in April of 2008 (using all of his fingers and keeping his toes as a reserve, your humble blogger estimates about 10 years have passed since applicant’s last date of employment with the City of Oakland).

The WCJ, however, found that applicant’s claim was not barred by the statute of limitations, because he did not have knowledge of compensable disability or industrial causation for more than one year prior to his filing a claim against the city of Oakland.

While working for the City of Turlock as a civilian crime analyst, applicant sustained a heart attack in 2002, and a friend told him that he might have a compensable claim. Applicant sought legal counsel and eventually filed an application against the City of Turlock in 2007, and, as stated above, against the City of Oakland in 2008.

The WCAB held that, because applicant became represented and filed a claim in April of 2007 against the City of Turlock, the knowledge of industrial injury should be imputed to him through his attorney, with respect to any claim against the City of Oakland. Because applicant delayed in filing an application for one year his claim became barred by the statute of limitations.

The Court of Appeal denied applicant’s petition for a writ of review.

The theory is an interesting one – the applicant is expected to know everything his attorney does. But how far can we stretch it?

In the Turco case, the applicant was expected to know he could file a claim against the City of Oakland because he was represented and was in the process of filing a claim against the City of Turlock. Could we apply the same concept to an applicant who had been represented in previous cases?

Jack files a cumulative trauma claim against Jane Corp for injury sustained from January 1, 2000 to January 1, 2001. Jack is represented and, after the case stips out, he continues to work for Jane Corp. In 2013 he files a claim for another cumulative trauma, this one from January 1, 2006 to January 1, 2007. He claims that he didn’t know that the injury was compensable until just recently. Can the fact that he is a repeat player in the comp system be used to bar his claim?

Often enough, we see repeat players in comp – ones who punctuate every turn in their job history with another claim, scoring free medical treatment for conditions of questionable causation and paid vacations of up to 104 weeks. Some of them can, without much difficulty, handle cases on their own because of their experience (and some of them do).

In civil tort law, for example, people of higher skill or education are held to a higher standard of care – a good Samaritan walking by an injured person on the street will have to provide a greater level of care if he’s a surgeon or a retired Army Medic. Your humble blogger submits to you that the same standard should apply for those who have become repeat players in the Comp system, and that the learning experience of past representations should negate claims of ignorance as to one’s rights vis-à-vis filing a claim.

Robinson Yang, Roland Yang, and Sotheany Hul got together one day and decided to start a business selling workers’ compensation insurance. They knew the competition was going to be fierce – already on the playing field were large insurance brokerage firms, offering huge networks and manpower. On the other side of the field were hungry young insurance wonderkids, ready to tackle any problem for a potential client and come up with creative new solutions.

But Yang, Yang, and Hul weren’t scared – they had an ace up their sleeves. Not constrained by the old way of doing things, by the limits of today, or by any law or moral imperative to be honest, they decided they would just sell fake insurance certificates to employers.

Typically, an employer hands over money to an insurance broker, and the broker gets a commission for the policy, while the balance goes to the insurer to cover the costs of coverage.

Not so much in this case – the three were arrested recently for defrauding “hundreds of victims in 19 states and losses exceeding $700,000.”

After an investigation that began in April of 2009, the California Department of Insurance made its move. (Meanwhile, the total count of fraud victims grew and grew).

If you bought insurance from RJC Insurance Brokerage and Optima Staffing, United Employer Services, and National Employer Services, you might want to contact a real insurance broker.

Now comes the fun part – how do you deal with an injuries sustained by the employees of hundreds of victim employers over the course of several years? The employers were effectively uninsured, but in such a state because of a fraud perpetrated by others. On the other hand, an injured worker is entitled to treatment and benefits…

In any case, every employer now has one more item to add to its to-do list: verify with the state that the insurance company is real and that you have an actual policy!

Your humble blogger was recently at the board getting a take-nothing order following a catastrophic injury which resulted in total permanent disability (or was it just a walkthrough? So hard to remember…) In any case, using his super-human ability to overhear conversations from five feet away, he picked up on the following case, and it’s an odd one at that.

So applicant (allegedly) sustains an injury, and then goes through the whole song and dance with the defense, which then works out a compromise and release agreement. Everyone is on board and everyone is happy, and the agreement is put before a worker’s compensation Judge, who approves it. Defendant sends out a check and applicant cashes it. End of story, right? Well, not so much.

The one missing detail in all of this was applicant’s signature.

That’s right – the defense and the Judge both overlooked the fact that applicant never signed the compromise and release.

So, four years later, applicant is calling his attorney wondering why he isn’t getting more money or medical treatment or unicorns and rainbows. Oh, and by the way, defendant can’t get its money back because the money is gone — applicant had spent it and now wants more!

Now, dear readers, before you ask at which Board this occurred or which Judge approved the compromise and release, I remind you that your humble blogger does not name names (unless it’s to shame fraudsters).

But, realistically speaking, what is to be done in this situation?

The injured worker did not sign the Compromise and Release, but he did sign the check and spent the money. On the other hand, the defense messed up – it submitted an unsigned Compromise and Release agreement.

Your humble blogger cornered one of the attorneys afterwards and demanded he spill as to the resolution of this case. After trying to escape several times, he finally gave in and explained that the parties agreed to settle the claim by having the defense cough in another $1,500. Hopefully, they will check to make sure the applicant signs the documents (and not just the check) this time before paying out.

I don’t know how this case would turn out on appeal (because that’s where it would be headed). What do you think, dear readers?

In the words of one observer, “it just keeps getting better and better.”

The Workers’ Compensation Appeals Board recently issued a “significant panel decision” on the issue of lien activation fees, echoing an earlier panel decision in finding that lien activation fees pursuant to the new Labor Code section 4903.06 must be paid prior to the lien conference. (And note, dear readers, merely paying the fee is not enough – it is the lien claimant’s burden to show proof of payment at the hearing.)

As my dear readers may recall, in the case of Jose Pedro Soto v. Marathon Industries, Inc., the lien claimant had managed to pay a lien filing fee by 11:00 a.m. on the day of a hearing which was scheduled for 8:30 a.m.

In this significant panel decision, reviewing the case of Eliezer Figueroa v. B.C. Doering Co., the lien claimant did not appear for a lien conference (the Declaration of Readiness to Proceed having been filed by another lien claimant) and failed to pay the lien filing fee. When its lien was dismissed with prejudice, the lien claimant, Orthomed, petitioned for reconsideration, arguing that the lien activation fee “is not payable where defendant has not served supporting documents” and that “the new lien regulations lacks [sic] latitude in allowing certain circumstances that are not just black and white.” (Such grammatical errors make your humble blogger sic.)

In an effort to make these cases a bit clearer, your humble blogger has endeavored to translate Orthomed’s argument as follows: “Waaaaa! But it’s not faaaaaaair! I think the rules should be different!”

Mr. Rock, a spokesman for the WCAB offered the following response:

The WCAB clarified the earlier ruling in Soto: the payment needs to be made before the hearing is scheduled to occur, not when it actually goes. We’re all familiar with the standing Board policy of “hurry up and wait,” and a lien representative cannot hide out in the cafeteria on the day of the hearing until its payment goes through.

Additionally, there is no “unclean hands” defense to paying the lien activation fee. It doesn’t matter if the defendant didn’t serve you with medicals, or refused to negotiate the lien payment or said that your finger painting isn’t worthy of his refrigerator door: you still have to pay up and seek redress through other avenues.

Furthermore, no notice of intent to dismiss the lien is necessary: the Labor Code serves as your notice of intent to dismiss.

Is this case binding authority? No. But to any workers’ compensation Judge reviewing the issue, it should be a clear signal of how the WCAB would rule. But in all honesty, why would a WCJ resist the dismissal of liens?

The workers’ compensation system is not here so that Lien Claimant XYZ can bill a defendant $90 for a box of tissues or $400 for the “use of an organic heating and drying device following aquatic emersion and exposure therapy” (towels; bathrobes).

The workers’ compensation system is here to provide injured workers with swift benefits, including medical treatment and replacement for lost wages, and to keep defendants from being crippled with defending (significantly more expensive) tort lawsuits.

The lien claimants can join an MPN or find another host to suck the life out of – comp has had enough.

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The content of this web log is for information purposes only and should not be construed as legal advice. No attorney-client relationship is formed by this site. If you would like to speak to a workers' compensation defense attorney, please contact Gregory Grinberg at 650-235-4008.